Supply > Demand

It’s been awhile since you’ve heard from us, but you won’t be disappointed on what we’re working on! Thank you for your support and patience, you’re the real MVP.
Now onto the real estate market:

Yikes.
It’s no wonder then, that the Bank of Canada held its benchmark interest rate at 1.50% this week, after a 0.25% hike in the previous meeting. Now with rates slowly creeping up, slowing down demand, supply on the other hand is continuing to build. What we will have at the end of the cycle is a build up of inventory and buyers who are unwilling, or unable to buy.
I hate to break it to you, but there has never been a ‘shortage’ of supply, there’s just been a shortage of education and the fear of missing out. Speculators and ‘investors’ borrowed money at next to nothing, to fuel the current real estate bubble. We are now getting a sneak preview into the hangover that will be left, once developers finally complete their builds (if they get sufficient funding and all else remains equal).
According to local real estate realtor, Steve Saretsky, speculators are running short of buyers, as a result of tighter lending requirements, making the market less liquid.

If we go back and take a look at the numbers from REBGV, 567 detached homes sold in August, 2018.
Only 567 homes sold, yet we’re sitting on 6,225 active listings AND we have more developers building more homes? Despite the trends, prices remain relatively high for the average household, but if this continues, we’re going to see a lot of desperate sellers on the market.
Take this house for example:
3656 Blenheim Street, Vancouver as found on Zolo.
Currently listed for $1,999,000, nothing to see here right?
But then you see that the 2017 assessed value is $2,419,900 (I’ll just leave the link to BC Assessment here), the property sold for $2,380,000 in 2016 and initially listed for sale in April for over $2,600,000. Yes, we’re cherry picking here, but surely this can’t be the only one?
Comment your thoughts!
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